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Shares of iRobot Corp. (IRBT, Financials) fell 34% in premarket trading Wednesday after the consumer robotics company reported a steep decline in fourth-quarter revenue and warned about its ability to continue operating.
Revenue dropped 44%, landing at $172 million in the fourth quarter for the firm. Its net loss expanded to $2.06 per share from a smaller loss in the previous-year quarter. Reflecting more expenses and lower revenues, the non-GAAP gross margin dropped from 18.9% a year earlier to 12.8%.
Citing reduced consumer demand, increasing competition, macroeconomic uncertainty, and tariff policies as main hazards, iRobot said there is "substantial doubt" about its ability to remain as a going concern for at least the next 12 months. In a home robotics sector growingly competitive, the business has battled diminishing revenues. The cancellation of its intended purchase by Amazon in January after legal objections has also had an impact on its financial situation.
iRobot stated it has changed its current term loan and is working with its main lender in order to increase its liquidity. The board of the firm is looking at strategic options, which can call for selling portions of the company or reorganizing.
Following closing on Tuesday at $6.31, iRobot's premarket trading plunged 34% to $4.16, setting an all-time low. Since hitting highs during the epidemic, when consumer robotics demand skyrocketed, the stock has dropped dramatically.
This article first appeared on GuruFocus.